eBusiness Weekly
The rebuilding of Zimbabwean industry has seen most manufacturers still living in the past and wanting someone else to supply their raw materials, often these days using imports rather than relying on Zimbabwean production.Yet in the food processing industries in particular, and in some other areas, it would not be difficult to recreate or upgrade Zimbabwean production of suitable feedstock. But industrialists need to be far more active in taking control of their full production chain, as President Mnangagwa himself pointed out on Monday in his serious meeting with industry leaders at State House.
He went far in his public remarks before the hands-on closed-door session, making it clear that the Government was very open to agricultural investment. Oil seed and wheat were two suggested areas where he urged the oil-extraction and milling industries to muscle in with full Government support.
Zimbabwe used to be self-sufficient in raw materials for cooking oil. There were three basic sources of feedstock: soya bean, sunflower and cotton seed. Now industrialists are heavily reliant on imported soya, costing the country $20 million a month from the limited pool of foreign exchange. That could be changed in a couple of years.
The cotton sector has been recreated. One by-product of cotton ginning is the seed waste. This can be refined into a high-grade cooking oil; the technology has been around for over a century and cotton oil was the dominant vegetable cooking oil in the United States for half a century up to the Second World War when falling production and a diversion of the exceptional long shelf-life oil into other uses forced a substitution by soya oil. Admittedly cotton seed oil needs to be carefully refined, a process that produces small but useful quantities of soap and glycerol plus a solid waste of the moderately toxic pigment that must be removed. But it used to be sold in Zimbabwe.
Sunflowers are still grown, but in nothing like the quantities of earlier decades when they were an established cash crop for many communal farmers. The oil is still extracted in many rural areas by a simple hand-operated crusher, but commercial production using the more modern solvent processes, as is done with soya, has died.
Yet for decades there was a premium brand of Zimbabwean sunflower oil on our supermarket shelves and when we were importing most of our cooking oil a few years ago sunflower oil was among the products brought in and snapped up.
There is a market and it is probably the first choice for any industrialist looking at expanding out of soya oil since it is a relatively easy crop to grow and process and the markets for seed and oil could easily be recreated.
Soya beans are not that hard to grow but Zimbabwean production was dominated by the larger commercial farmers and their smaller scale successors were never given much of a chance. Major commercial growers included it in a complex crop rotation with maize, tobacco and pasture, since it is a legume that pumps nitrogen into the soil, and it would not be difficult with modest imagination to introduce the crop on a large scale again among the better of the new farmers. Two oil expressing companies have already started contract farming of soya.
Thanks to imports everyone has seen, and probably used, canola oil and margarine. This comes from the seed of rape, that same vegetable grown for its leaves in every kitchen garden in Zimbabwe. Slightly different varieties have been developed to maximize the most desirable oils but it is a crop that could easily be grown in Zimbabwe to give a fourth source of cooking oil, again requiring a smart industrialist to move in.
The tobacco industry provides the great model for contract farming. A crop dominated by a couple of thousand large growers 20 years ago is now produced by tens of thousands of farmers under contract with fields ranging from half a hectare upwards.
The major tobacco companies now have lists of reliable and competent farmers who between them last season produced the largest ever tobacco harvest in Zimbabwe. Any farmers with the skills to grow tobacco, not the easiest crop in the world, could also grow soya as an extra cash crop so long as the same system of input contract, advice, back-up and marketing was available. Tobacco merchants had to totally re-organise their industry and take control of production to stay in business. Now they are expanding their factories and reaping the results.
And that whole industry is entirely private enterprise. The Government helps with co-ordination and has put in the industry-generated legal framework, but there is no taxpayer money in tobacco; it is a win-win combination of private companies, merchant banking and hard-working and skilled farmers.
Wheat can be grown in Zimbabwe. But it must be grown in winter under irrigation. Every other major crop needing irrigation are summer crops, and irrigated land can produce two crops a year, a summer harvest (perhaps of soya) and a winter harvest of wheat. The Tokwe Mukosi dam is now finished to impound the largest lake after Lake Kariba. It can irrigate 25 000 hectares, enough to produce at least a quarter of Zimbabwe’s wheat requirement. Yet the potential has hardly been tapped. We think it is about time the milling industry, the Government and other interested parties started creating serious plans on how to use that water, how to finance the infrastructure, how to farm the irrigated land and start production next winter. President Mnangagwa made it clear that the Government is open to all suggestions with no preconceived models.
Even 20 percent of Zimbabwe’s petrol is supposed to be ethanol. Yet there have been periods of zero percent and even now the minimum is set at 10 percent. The biggest bottleneck appears to be a shortage of sugar cane. Yet the ethanol plant is on the Save River, the largest river not forming a border. Sorting out the farming problem obviously needs to be done, and with the expansion in demand then seeing if more investment in the factory side is required. But if we can grow 20 percent of our petrol, we should.
There were many areas under discussion at the Monday meeting. But on production the President was surprised, and we think irritated, that he does not have industrialists hammering on his door with plans to expand local production rather than rely on allocations for imports.
He has made it clear that he regards Zimbabwe’s manufacturing community as a priceless asset that needs to be expanded and worked harder. Industrialists should grab the invitation.
